Did you know that the Employment Appeal Tribunal has ruled that organisations which contract out services may be liable for the discriminatory actions of their staff towards their contractor's staff? Both contractors and those who contract out services would be well advised to review their equal opportunities procedures in the light of this decision.
The case involved Leeds City Council ("the Council") and an employee of its Arms Length Management Organisation (ALMO), West North West Homes Leeds Ltd, following an act of discrimination from a Council employee towards the ALMO employee. The EAT decided that because the work of the ALMO was carried out for the benefit of the Council, the Council could be sued by the ALMO's employee.
What were the facts?
In this case, Mr Woodhouse, an employee of the ALMO, alleged that
Mr Chapman, a Council employee with whom he worked under the
management agreement with the Council made racially derogatory
comments to him.
What did the Employment Tribunal and Employment Appeal
Tribunal decide?
The Employment Appeal Tribunal (EAT), upheld the original
employment tribunal decision that Mr Woodhouse's role was as
much for the benefit of the Council as it was for the ALMO. As a
result, the Council could be held liable for discriminating against
Mr Woodhouse through the actions of its employee.
What are the implications?
This case is highly relevant to organisations involved in
arrangements such as outsourcing, agency work or straightforward
services arrangements.
When entering into such arrangements you should consider:
- updating any equal opportunities policy to highlight the issue of third party harassment;
- providing employees with training on the extent of their
obligations;
seeking evidence that the other party has a rigorous approach to equality and diversity. - For the housing sector, the case also serves as an authority that, where an ALMO employee is discriminated against by a Council employee, the individual is able to take action against the Council in the employment tribunal. However, this does not extend to other employment rights such as unfair dismissal.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.